Long-Term Market Equilibrium in Smart Grid Paradigm With Introducing Demand Response Provider in Competition

With introducing demand response provider (DRP) in smart grid paradigm, small consumers can actively participate in various demand response programs, especially price-based programs. This newly important matter can significantly affect the power system problems, such as expansion planning. Accordingly, consideration of small consumers via DRP in long-term market equilibrium can be notably useful. This paper proposes a bi-level game framework with iterating between master and slave level to find the long-term market equilibrium in the pool-based market, including opponent generation companies (GenCos), DRP, and independent system operator (ISO). In the master level, a set of investment decisions are generated. Then, the system information is updated and the market is cleared in the slave level. After evaluating all decision-making options, the ISO selects the best option based on a tradeoff analysis. The proposed method is examined on a system with one DRP and two GenCos under ISOs supervision.